Research has found that several key factors contribute to the long-term success of sharp bettors. One important trait is strong statistical thinking, meaning they rely on logic and data rather than intuition. They also tend to be less impulsive, meaning they don’t chase losses or make emotional bets. Additionally, they often have connections with other experts, allowing them to share insights and strategies (Newall & Talberg, 2023).
Sharp bettors usually place their bets earlier rather than waiting until just before a game starts. They also focus on fewer events, meaning they don’t spread their money across too many bets. Another common strategy is betting on smaller odds, which often represent more predictable outcomes (Innocenti et al., 2013). Instead of judging success based only on whether a bet wins or loses, they evaluate their decisions based on expected value, meaning they focus on whether a bet was smart rather than whether it paid off (Newall & Talberg, 2023).
Another key to success is diversification, or spreading bets across different factors like value, investment strategies, and momentum (Brightman et al., 2017). Some bettors also use dynamic weighting methods, which means they adjust their betting amounts over time to optimize profits (Lioui & Tarelli, 2020).
One interesting approach is betting on favorites rather than underdogs. This goes against the common trend of bettors preferring longshots, but studies have shown that favorites can sometimes be undervalued, making them a better long-term investment (Andrikogiannopoulou, 2011). However, even sharp bettors must be careful when using Kelly and fractional Kelly betting strategies, which involve adjusting bet sizes based on perceived edge. If used incorrectly, these methods can expose bettors to short-term risks and potential losses (MacLean et al., 2010).
Instead of judging success based only on whether a bet wins or loses, they evaluate their decisions based on expected value, meaning they focus on whether a bet was smart rather than whether it paid off
Summary of: Newall & Talberg 2023
Anecdote
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Articles Cited
- “C. Brightman, Vitali Kalesnik, Feifei Li, J. Shim (2017): A Smoother Path to Outperformance with Multi-Factor Smart Beta Investing January 31 , 2017, –
- To maximize risk-adjusted returns, investors should diversify across smart beta strategies that access multiple factors (value, low beta, profitability, investment, momentum, and size), and systematically and dynamically rebalance the portfolio.”
- “Abraham Lioui, Andrea Tarelli (2020): Factor Investing for the Long Run, https://doi.org/10.2139/ssrn.3531946
- Long-term risk-averse investors can benefit from implementing dynamic weighting schemes for characteristic-based portfolios, which show significant time variations in their abnormal returns and market exposures, rather than using simple fixed-weight schemes.”
- “P. Newall, Niri Talberg (2023): Elite professional online poker players: factors underlying success in a gambling game usually associated with financial loss and harm, https://doi.org/10.1080/16066359.2023.2179997
- The paper qualitatively analyzed interviews with 19 elite online professional poker players to examine factors that contribute to their success, in contrast with disordered gamblers who typically experience financial harm.”
- “L. MacLean, E. Thorp, W. Ziemba (2010): Long-term capital growth: the good and bad properties of the Kelly and fractional Kelly capital growth criteria, https://doi.org/10.1080/14697688.2010.506108
- The Kelly criterion has both advantages and disadvantages: it maximizes the limiting exponential growth rate of wealth, but its suggested wagers may be very large and risky in the short term.”
- “G. Bottazzi, Daniele Giachini (2019): Betting, Selection, and Luck: A Long-Run Analysis of Repeated Betting Markets, https://doi.org/10.3390/e21060585
- The paper considers a repeated betting market with two agents who wage on a binary event according to generic betting strategies, and derives new criteria based on the difference of relative entropies to determine the long-run wealth dynamics of the two agents, showing that it is generically possible for the ultimate winner to be decided by luck.”
- “A. Innocenti, T. Nannicini, R. Ricciuti (2013): The Importance of Betting Early, https://doi.org/10.2139/ssrn.1999459
- Bettors perform better when they place their bets farther away from the game day, due to information overload as the event approaches.”
- “Angie Andrikogiannopoulou (2011): Market Efficiency and Behavioral Biases in the Sports Betting Market, –
- The paper examines the efficiency of the soccer wagering market and the behavioral biases of individual bettors, finding evidence of a mild systematic bias known as the favorite-longshot bias where bettors tend to underbet outcomes with short odds and overbet outcomes with long odds.”
- “A. Constantinou, N. Fenton (2017): Towards smart-data: Improving predictive accuracy in long-term football team performance, https://doi.org/10.1016/j.knosys.2017.03.005
- The authors developed a model that can accurately predict the total league points a football team will accumulate throughout a season using limited data, and this model outperforms other relevant models while also providing insights into the factors that influence changes in team performance.”
Insufficient Detail?
At times it is difficult to answer the question as there are not enough relevant published journal articles to relate. It could be that the topic is niche, there’s a significant edge (and researchers prefer not to publish), there is no edge or simply no one has thought to investigate.
